Malik Akhtar, CPO Consumer Health at Bayer, told the State of Flux London SRM Summit 2026 how the company narrowed its supplier management program to focus on strategic partnerships.
Bayer’s consumer health business now counts 19 key suppliers. Previously, the company had a much looser idea of which relationships it was actively managing. Getting to that number took a new company-wide operating model, a clear value proposition for supplier management and strict segmentation.
Malik Akhtar, CPO Consumer Health at Bayer, set out the approach at the State of Flux London SRM Summit 2026 on November 3. The session fell on the day Bayer reported its third-quarter results.
A Company Redesigned Around Teams
Supplier management at Bayer sits inside a wider overhaul called Dynamic Shared Ownership (DSO). CEO Bill Anderson introduced it about three years ago. The model moves decisions to the teams doing the work, turns managers into coaches and replaces annual planning with 90-day cycles. The aim of the restructure is to give Bayer, a 163-year-old multinational, the speed of a start-up while keeping its scale.
Bayer has split itself into about 2,000 micro-enterprises. Each one is built around a customer, a product, a technology or an enabling function such as procurement. The company has cut its management layers from 12-13 to 5-6, and a coach now supports 15 to 30 or more people.
Akhtar said structure alone does not deliver the change. “The organizational structure is an important starting point, but unless you behave differently and you have a different mindset, it will never work,” he said. He put Bayer at 60% to 70% of the way there and said the shift is starting to show in business performance.
DSO also changed Bayer’s procurement strategy, now summed up as “Buying Better.” It rests on four aims: effective decisions that maximize impact, efficient buying that optimizes resources, responsible procurement and “ignited networks” of stakeholders and suppliers.
Selling Supplier Management to the Business
Akhtar called the value proposition the most important of the three supplier management fundamentals he covered. It is the pitch procurement uses with senior stakeholders, and it rests on four pillars: resilience and risk, innovation and growth, sustainability and performance, and strategic partnerships and value.
Bayer currently leads with risk. Akhtar recalled the surge in demand for vitamins during COVID-19, when existing supplier relationships helped protect continuity of supply. Innovation matters as well, because consumer health innovation tends to be adjacent: a new flavor or pack size, usually brought by suppliers. Sustainability depends on suppliers too, since Akhtar said most of the division’s carbon footprint sits in its supply chain.
Segmenting With Discipline
Akhtar said Bayer’s biggest early problem was that “everybody thought they were doing SRM.” One internal estimate put the number of managed relationships at around 400. “If you’re doing this properly, you’re focused on far fewer relationships,” he said.
Bayer now sorts suppliers into three tiers. Key suppliers are fully managed. Base suppliers are lightly managed. Transactional suppliers get no proactive relationship management. New suppliers start as transactional, and a calculated segmentation cycle every two years acts as a checkpoint.
Spend no longer drives the segmentation. Akhtar said some of Bayer’s largest suppliers are transactional relationships in a heavily regulated market. “You should be investing your time, your effort and your highly skilled resources in the relationships where there is a bigger openness to innovation and collaboration, because they will help you to secure the future,” he said.
Treatment Strategies as Guidelines
Each segment comes with a treatment strategy covering supplier manager nomination, governance, performance management, sustainability evaluation and supplier development. Few elements are mandatory for every supplier: onboarding, offboarding and segmentation itself. Escalation management becomes mandatory for GxP suppliers. Risk assessments are triggered by risk exposure and do not depend on segment.
Staffing depends on the supplier’s size and complexity. A handful of suppliers, such as major marketing groups and R&D alliance partners, each have a dedicated manager. In manufacturing, one supplier manager typically covers two or three suppliers.
About half of Bayer’s consumer health output is made by contract manufacturing partners. That makes visibility below the first tier a priority. “Probably one of the biggest unlocks is transparency further down into the supply chain,” Akhtar said.
For outsourcing leaders, Bayer’s experience points to three moves. Pitch supplier management in business language, with risk as the current lead argument. Segment strictly enough that the key tier stays small. Then put disproportionate effort into those few relationships, where collaboration and innovation do the most to secure supply.
